Posted on 06/27/2007 11:12:20 AM PDT by 300magnum
CONCORD --This could hurt worse than even the largest of the textile layoffs.
The parent company of Philip Morris USA -- Cabarrus County's biggest taxpayer, a top charitable supporter and one of the highest-paying manufacturers in the Charlotte region -- said Tuesday that it would close its Concord cigarette plant, where about 2,500 people work.
It's the latest old-line industry to desert a region of North Carolina that already has been pummeled by several years of textile and furniture plant shutdowns.
The pain from the latest closing will be felt for years, Concord Mayor Scott Padgett said. Philip Morris represents 13 percent of the city's tax base.
"That will have a ripple effect on about every business in the community, and in many facets of our lives," he said. "Everything from corner gas stations to cleaners to grocery stores."
Almost four years ago, textile giant Pillowtex closed after years of faltering sales. The fall of the former Cannon Mills wiped out more than 4,000 jobs in Cabarrus and Rowan counties, the largest mass layoff in state history.
The area remains fearful that more jobs will vanish after the sale of Concord telecommunications provider CT Communications is completed this year. Truck manufacturer Freightliner in nearby Cleveland, in Rowan County, laid off almost 1,200 people in April.
Cabarrus had begun a fragile comeback, landing a $1.5 billion biotech complex being developed at the old Pillowtex site, although the number of jobs it will generate is uncertain.
Workers face tough questions
Concord's Philip Morris operations will be consolidated with those in Richmond, Va., by the end of 2010, and a spokesman said the company hoped it would be able to offer jobs there to most Concord workers. More than 1,900 are hourly, and more than 500 are salaried employees.Hourly wages at the Concord plant typically run from $17 to $29 an hour, workers said.
Concord workers who lose their jobs will be eligible for three to 20 months of pay and benefits.
Neal Queen heard rumors the plant would close, but he didn't believe them. Queen, 24, of Concord, has worked in product support at Philip Morris for a year.
"I don't know what I'm going to do ... either find a job for less money or move for more money," Queen said.
Older employees may try to stick it out; workers will finish dismantling the plant in 2011. More than half the employees will be eligible to retire by the end of 2011, company spokeswoman Paige Magness said.
Fewer than 200 workers transferred to Concord after the company's Louisville, Ky., plant closed in 2000. Employees wondered Tuesday how many of those people would want to uproot again and move 270 miles to Richmond.
Outside the Concord plant, workers filed out during the 3 p.m. shift change.
One man stretched his hand out the window of his white sedan and yelled, "See you in Virginia."
A setback for charities
From United Way to Meals on Wheels, nonprofit groups in the region are bracing for a hit.
The Philip Morris Employee Community Fund last year raised $900,000 for 30 agencies in Cabarrus, Mecklenburg, Rowan, Stanly and other counties, the company said.
That means United Way will need to raise more money in future campaigns, officials say.
Mayor Padgett said Philip Morris had been generous to the community, including numerous corporate grants.
For example, Philip Morris is the largest corporate donor for the Cabarrus Arts Council, having given $113,920 during the past seven years. Supported programs include performances by an African drummer/storyteller and teaching residencies by the Latin Ballet of Virginia.
The closing "without question will create a challenge for those agencies to replace those funds," said Ed Runte, United Way's vice president for Cabarrus County.
"Obviously it's going to hurt."
State ready to respond
State lawmakers and leaders were placed on alert early Tuesday.N.C. Sen. Fletcher Hartsell, a Concord Republican, got a phone call from the Cabarrus economic development office at 7:30 a.m. When he got to the office an hour later, three Philip Morris representatives were waiting to brief him.
Gov. Mike Easley said the state was ready to make sure workers have health insurance and other benefits.
The shutdown is not a surprise, Easley said, given the push by public health officials to ban cigarettes. He also said the plant's closure isn't a crisis.
"This is not one where they've announced today that they're closing down 500 jobs this week," he said. "We'll attack it the same way we do all the other ones."
Tax base will take a hit
Philip Morris is sitting on valuable property on both sides of U.S. 29, about three miles north of Lowe's Motor Speedway.
Its 2,100 acres and sprawling plant have an assessed value of $515.6 million, along with another $591.8 million in equipment.
Such figures have local officials scrambling to prepare for the hit to local budgets. Their only saving grace is that the huge loss of tax revenue won't come for at least a year.
Philip Morris is by far Concord's largest taxpayer, contributing about $4.9 million in total city taxes. The company is also the top taxpayer in Cabarrus County, providing about $7 million, or 7.2 percent of the county's tax revenues last year.
Philip Morris said it doesn't plan to start moving equipment off the site until next year, so the city and county will be able to tax it at full value this year.
Cabarrus County Manager John Day told county commissioners the loss of Philip Morris would cut revenues by a lot more than Pillowtex's closing did. The years-long decline in production at the Kannapolis plant meant that, by the time it closed, in 2003, the company was paying only $684,000 in taxes to the county.
Local economic planners and others said they would work on attracting jobs for the displaced workers as well as on figuring out what to do with the site. It could hold another manufacturer, serve as corporate headquarters or fill other needs, said John Cox, head of the Cabarrus County Economic Development Corp.
His counterpart in Rowan County, Randy Harrell, said Philip Morris' land might be more valuable broken into pieces.
"The question is, `Is the land more valuable than the building?' That's prime land out there," he said. -- Staff writers Kat Greene, Mark Johnson and David Ingram and researcher Marion Paynter contributed.
The Concord Plant
Facts about Philip Morris USA's cigarette plant in Cabarrus County:
1983: Plant opened.
$295 million: Company's estimated initial investment.
2,100: Acres the plant covers.
2,500: Number of workers now.
155 billion: Number of cigarettes made there per year, mainly Marlboros.
17.1 million: Average number of cigarettes made there in an hour.
2.4 million: The plant's square footage, about the size of Northlake and Carolina Place malls combined.
$200 million: Size of company's 2004 investment to modernize the plant. -- Adam Bell and Scott Verner
This ought to delight all the smoking police.
It’s okay, the Chinese cigarettes will be much healthier, no doubt!
Not to pick on NC,but is this a sign of too many people moving to NC? Here in the People’s Republic of Massachusetts,I know of many people going there. Is the bloom off the rose?
Why?
Aren't they organized to not make a profit?
They can lose buckets full of money, now!
It’s more of a sign of Government taxing an industry into oblivion.
What do you expect to happen when you are selling a product that has a declining customer base?
Folks, please remember that in the Clinton-Gore glory years of 1997-2005, our once-great nation benefited from 23 million new jobs, many in the manufacturing sector. In the Bush years so few men and women are employed in manufacturing that hardly anybody notices when another big plant employing thousands in high wage jobs closes its doors forever.
The new Rust Belt.
How many new jobs have come during the Bush administration? You forgot to mention that. I remember the whole textile industry leaving the country while Clinton was in office
Tobacco products may have a dying customer base but the number of U.S. customers is hardly declining. Youngsters replace dying smokers at a rate of more than 2,000 per day, maintaining smokers' numbers at more than 65 million for the past several years.
Oh, I thought Phillip Morris played basketball for the Tar Heels, when I read the headline.
Funny
Go back to the DU, troll!
Their problem for having a poor business model. This is a product that, when properly used, results in the death of the consumer. It’s a wonder they get any business at all.
Liberal yankees move to NC. NC becomes more liberal. NC loses more business. That's my theory.
NC has become very anti-smoking over the past few years. They finally banned smoking in the last couple of bars at the Charlotte airport a few months ago. I do believe there is a correlation there.....
On a side note I had an epiphany....
Smokers are the safest people to have on an airplane. Why? You have to go outside the airport to smoke now, so that means an extra trip through security during a layover. In turn, I am screened at least twice and possibly 3 times depending on number of layovers and there duration. I just thought that was interesting....
Clinton was president from 1997 -2005? Uhhh...manufacturing jobs are leaving NC because of NAFTA. I believe Billy Clinton might know a few things about NAFTA since it was his baby.
By the way. Clinton was President from Jan 1993-Jan 2001.
Just put it in your carry on bag/laptop bag. The last 7 flights I've been on this year I made it through WITH my lighter this way, and that's going through security twice each way due to having a smoke break during layovers. The TSA doesn't really check or care unless it's in your pocket. Which leads to another depressing thought.....if it's that easy to get through a banned(though harmless) item. What else are people getting through?
Paradoxically, the government also subsidizes tobacco.
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